AI chipmaker Nvidia (Ticker: NVDA) released its fourth-quarter earnings after the closing bell yesterday and, as expected, financial advisors sat up and took notice.
Of course, that tends to happen when your stock is up 60 percent in 12 months, more than 1,780 percent in the last five years and sports a market capitalization of more than $3.11 trillion.
But with its stock down over 8 percent so far in 2025 – including a 3 percent post-earnings drop today – and increasing doubt over how many more miracle quarters CEO Jensen Huang can conjure up, how much longer will the leader of the so-called "Magnificent Seven" remain a market bellwether?
To start, the quarter was once again impressive, with Nvidia posting revenue of $39.3 billion, up 12 percent quarter-over-quarter and 78 percent year-over-year. Earnings per share beat expectations with $0.89 adjusted versus $0.84 estimated. Nvidia posted record annual revenue, which was up 144 percent to $130.5 billion.
Andrew Graham, founder and portfolio manager at Jackson Square Capital, said the report is a relief for the broader market's concerns regarding slowing US growth and cracks in the AI story. Graham also noted that Jensen defended gross margins on the conference call with a mention of a return to mid-seventies late this year. As a result, he would consider opening fresh longs before the company’s mid-March GPU Technology Conference (GTC) event.
The one place to “ding” NVDA would be on margins, according to Graham, as gross margins took another step down to 71 percent, decelerating from a peak of 79 percent in April and 73.5 percent last quarter.
All things considered, Graham said Nvidia should still be considered a bellwether despite the stock’s recent skittishness.
“Absolutely,” Graham said. “Nvidia’s entire product portfolio serves and drives the biggest secular trend in technology since the adoption of cloud computing.”
Elsewhere, Jerry Sneed, senior private wealth advisor at Procyon Partners, also categorizes Nvidia as a bellwether stock, calling the company the “architects of the artificial intelligence revolution.” In his view, Nvidia’s latest results were strong enough to provide a floor for the overall market at these levels at least until macroeconomic factors regain focus.
“We are still in the early stages of the AI cycle, making it essential to stay long Nvidia. The company is poised to generate revenue from industries that investors have yet to fully appreciate,” Sneed said.
Sneed points to revenue from the automotive and robotics segment as untapped areas. Those segments grew 103 percent year-over-year and he expects them to become increasingly significant in the coming years.
Sneed said he increased his allocation to the stock during the Deepseek selloff, so he’s not adding to that position right now. However, if a market correction occurs due to macroeconomic fears, he will buy more of both Nvidia and the hyperscalers.
“I still believe many investors don’t fully understand NVDA’s business, its significant competitive advantage, and just how smart Jensen is,” Sneed said.
Meanwhile, Ryan Bond, wealth manager at Savvy Advisors, said the market’s negative reaction to Nvidia’s impressive results confirms that expectations were already sky-high, and even stellar results weren’t enough to push the stock higher. At this stage, he’s standing pat when it comes to the stock as the long-term AI trend remains intact. That said, he remains “mindful of valuation risks and the stock’s volatility.”
And while Nvidia’s results may impact sentiment, Bond said other tech giants like Apple (Ticker: APPL) or Microsoft (Ticker: MSFT) are more representative of broader tech market trends.
“Yes, it is a bellwether for AI and the semiconductor industry, as its dominance in AI chips and data center growth makes it a leading indicator of demand in these areas. However, it is not necessarily a bellwether for the broader tech sector, as its growth is heavily tied to AI adoption rather than the general trends affecting software, consumer electronics, or cloud computing,” Bond said.
Moving on, Mark Kasimirsky, principal advisor at MFA Wealth, said Nvidia’s fourth-quarter report reinforces the company’s dominance in AI and data center infrastructure. He feels that Nvidia remains a core holding in any AI-driven portfolio. Even so, Kasimirsky has no problems with investors taking profits in the name.
“If valuation concerns are an issue, trimming some profits while maintaining exposure could be a smart move,” Kasimirsky said.
And yes, he “absolutely” sees Nvidia as a bellwether, especially when it comes to AI, semiconductors, and the broader tech sector.
“Nvidia is the quintessential ‘a rising tide raises all boats’ stock. When NVDA reports strong earnings, it often lifts the Nasdaq and AI-related stocks,” Kasimirsky said.
Finally, Todd Walsh, CEO and chief technical analyst of Alpha Cubed Investments, said the strong earnings may help build a short-term floor on the pullback the group has seen over the last month. Long term, he said investors should stay with their core holdings in the AI ecosystem as the technology gets built out over the next decade or so.
“We think that we are not in a bubble at this time, and longer-term investors will benefit over time as the AI ecosystem continues to be built out, as we do not feel we are anywhere close to the end game of this cycle. Just make sure to right size your positions, as there will be volatility throughout this process,” Walsh said.
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